Escalade, Incorporated announced that net income for the second quarter increased 15% to $2,255,000 or 17 cents per share versus 15 cents per share in the year ago comparable quarter, bringing first half net income up 34% to $3,409,000 or 26 cents per share versus 20 cents per share last year, all due to the turnaround of office products. Net sales declined 10% to $47,551,000 for the quarter, bringing year to date sales to $77,333,000, also a 10% decline.

Escalade Sports' net sales declined 4% to $28,569,000 for the quarter, bringing the seasonally slow first half to $42,590,000, a 5% decline. The first half of 2004 was the beneficiary of one time sales gains as some customers increased their inventories and bought earlier. Sporting goods net income was off 7% for the quarter, due to the lower sales. Mr. Messmer, president of Escalade Sports, stated that “Our largest customer has implemented a new strategy to enhance their profitability that is centered around product line reductions, margin increases, and reduced promotions that will result in a significant decrease in our net sales to that customer this year. Our efforts over the recent years to create growth by diversifying our product lines and customer base, along with the recent ChildLife acquisition, will result in increased sales in some segments that will partially offset this. For the full year, we expect that sporting goods revenues will be somewhat lower than last year, however, profitability should be flat to slightly up.” The Company also announced the construction of a new manufacturing facility in Reynosa, Mexico, that should be in operation in the first quarter of 2006 that will provide a second location in Mexico with the advantage of close proximity to low cost raw materials, labor, and a more centralized distribution point.

Net income at Martin Yale (office/graphic arts products) increased 76% for the quarter and is up 148% over the prior year as the company begins to reap the efforts of two years of cost cutting, facility consolidation, product rationalization, and management reorganization. Net income has also been helped by lower effective tax rates as the Company continues to build profitability in Europe where it can utilize tax loss carry forwards. Net sales were off 17% for the quarter to $18,982,000 and are off 16% year to date at $34,743,000 due primarily to product rationalization, discontinued business with unprofitable customers, and a temporary supply disruption of shredders that was resolved early in the second quarter. Mr. Reed, president and CEO of Escalade, stated, “We continue to cut costs and consolidate in Europe, however, our main focus is now shifting to product development and innovation, strategic planning, and further bolstering the management team for future growth. We expect continued profitability from Martin Yale throughout the balance of the year.”

Mr. Reed also stated: “We continue to look for other means of utilizing our strong balance sheet to further enhance shareholder value, including the continued review of acquisition opportunities.”

CONSOLIDATED CONDENSED STATEMENTS OF INCOME
    (Unaudited, In Thousands Except Per Share Amounts)

                           Three Months       Six Months      Twelve Months
                              Ended             Ended             Ended
                         09 July  10 July  09 July  10 July  09 July  10 July
                          2005     2004     2005     2004     2005     2004

    NET SALES           $47,551  $52,516  $77,333  $86,174  $210,838  $225,119

    OPERATING EXPENSES
    Cost of goods sold   32,348   37,125   53,207   61,643   149,954   163,827
    Selling and
     administrative      11,304   12,088   18,479   19,736    40,784    40,301
    Restructuring            --       --       --       --     2,366        --
    Impairment of goodwill   --       --       --       --     1,312        --

    OPERATING INCOME      3,899    3,303    5,647    4,795    16,422    20,991

    OTHER INCOME (EXPENSE)
    Interest expense       (494)    (573)    (780)    (938)   (1,614)  (2,121)
    Other income (expense)  162      319      407      301       125     2,847

    INCOME BEFORE INCOME
     TAXES                3,567    3,049    5,274    4,158    14,933    21,717

    PROVISION FOR INCOME
     TAXES               (1,312)  (1,096)  (1,865)  (1,607)   (6,248)  (6,577)

    NET INCOME           $2,255   $1,953   $3,409   $2,551    $8,685   $15,140

    PER SHARE DATA
    Basic earnings per
     share                $0.17    $0.15    $0.26    $0.20     $0.64     $1.18
    Diluted earnings
     per share            $0.17    $0.15    $0.26    $0.19     $0.63     $1.15